It kind of slipped underneath our radar last Friday, but Novell has released its financial earnings figures for the fourth quarter. While the company still shows a loss of 16 million USD (compared to 18 million during the same quarter last year), individual divisions of the company are doing quite well, with only two of them showing losses. Total revenue was 243 million USD. Interestingly enough, the company's Linux business is doing very, very well.

I have worked one several SLES project for companies that where MS only up until then and if it wasn't for the fact that SLES integrates really well with AD as well as the whole patent and reseller deal, they would never have considered Linux in the first place.

I know that this issue is a delicate one with many people in the Linux community but frankly I think it's a good thing. To begin with, I too was very skeptical of MS's motives but looking at the adoption rate of SLES with our customers, I've come to see it as a good thing. In the end, just because MS is distributing Linux does not in anyway reduce the exposure that businesses are getting to it.

The only point that saddens me in RedHat losing out. This was pointed out back when the patent deal was struck and it does seem to be coming to pass.

The only point that saddens me in RedHat losing out. This was pointed out back when the patent deal was struck and it does seem to be coming to pass.

Keep in mind that all the evidence we have is a Novell exec claiming that Novell is taking customers from Red Hat. Last I looked, Red Hat was #1 at 97% for customer loyalty and Novell ranked #7 at 70%. (Think about that. 30% did not answer "yes" to "Would continue to do business with Novell".)

I personally think that SLES has a great platform, I love Redhat as a company, as well as their commitment to quality. However I think that they are doing themselves an their customers an injustice when it comes to overall solutions.

I think that Novell has received a bad reputation for the deal with Microsoft. However their vision and offering is top-notch. If we compare offerings and overall complete vision Novell wins hands down.

The only reason they are not the preferred vendor IMHO is the ties to Microsoft and the community bashing.

If we look at solutions and honestly compare from a technology perspective.

I am asking people to compare based on the merit of the technology not emotions on their patent deal and give some real honest feed back, minus the slandering.

I'm not quite sure what you are disagreeing with. Are you saying that you think that the the CIOs of the companies which were Red Hat's and Novell's respective customers answered their questionaires, in the study I cited, based upon emotional reactions regarding the Novell-Microsoft deal rather then basing their answers on their actual experiences?

I respect your response and appreciate your response. I really am wanting an open dialog about what people actually think of Novell's offering in comparison to Redhat saying RHEL is better than SLES is really your opinion that is fine however there is not a way to accurately access which is better. That is why I said equal or better.

As for Identity Manager, Red Hat Director Server is no where near a competitor and is not even the same product class to compare it is more of a edirectory competitor.

IPA, KVM, are both immature in my opinion and are not fully integrated so I don't think we can count them yet.

I will give JBoss, I think it is an excellent technology. GFS is absolutely amazing. Red hat seems to be an application management platform company, On that you run apps from other vendors on as oppose to one that provide integrated enterprise solutions IMHO.

Again I am not against Red Hat I have them in my environment and they are stable server.

However when it came to rolling out an enterprise for my customer, their complete solution offering fell short, in terms of systems management (Windows and Linux), user management , security management, and compliance.

Again I am looking for technology opinions. So mine is that enterprise solutions Novell has a better offering.

Where is ZenWorks more than the Sattelite Server? Why Groupwise? It's hell like Exchange or Domino. There are so much better soulutions than groupwise. You can use every soulution on RHEL, there is no need for groupwise as an key feature. Novell doesn't have any product that really point this game out. The key products are still RHEL vs. SLES. With RHEL, JBoss, nearly perfect integrated SELinux, Sattelite Server an the RH DS you've a big, performant, scalable, Enterprise Platform. As you the the whole package which have to work together - Red Hat has the better package.

It makes me wonder why all the companies that I have worked for run their mission critical databases and applications on Sun's Solaris and/or IBM's AIX. In addition, they do not have many of these Unix servers in the data center. Just a few of them will take care of the enterprise. Does size really matter?

Most large enterprises that run mission critical applications whereby one cannot afford to lose a single transaction use big iron such as that Sun or IBM provides, along with their enterprise proven operating systems. Its all about RAS (Reliability, Availability and Serviceability). These enterprises need 5 9s or better reliability, and that simply cannot be had with a large farm of commodity servers running LINUX.

On the other hand, if you are running a Web-server based e-store, then needs are not so critical, allowing one to build solutions using low cost products like LINUX on commodity platforms, since losing a transaction or so every now and then won't tank your company.

i dont know about "high level" products
i know about packages, toolchain, building, enginering.
i know many distributions inner working and have modified or rebuilt most of them for different companies (including debian gentoo etc)

one thing i know, is how *good* red hat is.
their package quality beats everyone down. they actually patch stuff that isnt working too, and do it well. you'll see every other distro use their patches, and when they dont, features don't actually work. (happens often enough)

So yeah. I don't like RPM, etc etc. But they do a real good job. I would chose RHEL eyes closed over SLES (at least, at the moment, everyone can improve/deprove

One note though, OES is not the dying NetWare. OES is the Novell stack of apps and services which, while born on NetWare, will run on either the Linux or NetWare kernel. It's been more than three years since Novell ripped those core services away from being exclusive to NetWare. eDirectory and groupwise have been cross platform for longer than that.

you are wrong and there is no room for pitying Redhat. Here's news for you, as in 2007-old news:

"Red Hat, the largest Linux vendor, and Ubuntu-maker Canonical have both rejected calls from Microsoft to forge a deal similar to the one the Redmond giant signed with Linux distributors Novell, Xandros, and Linspire."

I have worked one several SLES project for companies that where MS only up until then and if it wasn't for the fact that SLES integrates really well with AD as well as the whole patent and reseller deal, they would never have considered Linux in the first place.

That's the way abuse victims think ;-).

The AD integration has been done by the Samba people for quite a while now, and has been done in spite of Microsoft. Samba 4's upcoming AD replacement functionality is the same. I have seen absolutely zip that Microsoft has done in this deal that Novell couldn't have done themselves with some vision, leadership and backbone.

I know that this issue is a delicate one with many people in the Linux community but frankly I think it's a good thing.

It doesn't really have too much to do with the Linux community. I have never seen any company make pots of money, or just survive, by getting into bed with their biggest and most predatory competitor and whining "Pretty please, don't kill us".

To begin with, I too was very skeptical of MS's motives but looking at the adoption rate of SLES with our customers, I've come to see it as a good thing.

How long do you think that will last when those SLES servers are all alone, surrounded by Windows Servers and domain controllers?

The only point that saddens me in RedHat losing out.

Judging from their revenue versus Novell, I would say conclusively not. They have some leadership and some backbone at least, and do not want to rely on a competitor to survive. You shouldn't need to be a genius to work out how stupid relying on a competitor for survival is.

I have found that there is no amount of reasoning that will persuade some people that Novell isn't evil. Some people just do not employ critical thinking, they just respond emotionally and take their marching orders from other zeolots. I did not like some of Novell's deals BUT it has been a very good deal for Novell's customers. People want interoperability. As a free software advocate I would like that interoperability to be as open and as possible but no one in their right mind beleives that my beliefs are in the majority amongst businesses that use Linux. They want their stuff to integrate well and Novell does that without rejecting the GPL. This is a win for Novell's customers and a win for linux market penetration. So far all the patent scares that have been espoused by the anti-Novell zealots have not materialized and I doubt they ever will.

I have found that there is no amount of reasoning that will persuade some people that Novell isn't evil. Some people just do not employ critical thinking, they just respond emotionally and take their marching orders from other zeolots. I did not like some of Novell's deals BUT it has been a very good deal for Novell's customers. People want interoperability. As a free software advocate I would like that interoperability to be as open and as possible but no one in their right mind beleives that my beliefs are in the majority amongst businesses that use Linux. They want their stuff to integrate well and Novell does that without rejecting the GPL. This is a win for Novell's customers and a win for linux market penetration. So far all the patent scares that have been espoused by the anti-Novell zealots have not materialized and I doubt they ever will.

Microsoft won't sue against Linux, they can't afford to. The patents held by the Open Invention Network and the Patent commons would be brought to bear in a countersuit, and it would be a mutually-assured-destruction scenario.

Finally ... what would Microsoft sue over? Samba & networking over a LAN? SMB is IBM's invention, and networking services over a LAN has got to have been pioneered by Novell Netware, not Microsoft software. Wordprocessing & Office suites? Wordstar. Operating systems? ... predate anything in use today on the desktop by decades. Prior art everywhere you look.

So agreed, there is no substance in Microsoft's patent bluster against Linux. None whatsoever. Absolute hot air.

If Microsoft were serious about getting value from their patents for their shareholders, then they would actually join the OIN and the Patent Commons and take the deal that is offered them ... free use of those patents in return for a promise not to sue Linux.

So the whole thing boils down to the fact that Microsoft needs a PR excuse to make patent threat noises against Linux. That is the ENTIRE extent of it. Linux users have an "undisclosed liability" to Microsoft according to Ballmer. Ballmer needs to be able to pretend that this is so to give the illusion that there could be some cost, and some business risk, attached to using Linux.

Businesses indeed do fall for this waffle. They spend billions to avoid this made-up monster, this evil phantom.

The only thing then that Novell has bad karma from, then, is that Novell profits from all this. Novell is complicit in Microsoft's continued success in suppressing the adoption of Linux. Adopting Linux would be an absolute boon (huge reduction in costs, death of malware) for people and businesses worldwide (with the possible exception of software houses such as Microsoft, MacAffee & co and Novell). But overall, an absolute boon.

The only thing then that Novell has bad karma from, then, is that Novell profits from all this. Novell is complicit in Microsoft's continued success in suppressing the adoption of Linux. Adopting Linux would be an absolute boon (huge reduction in costs, death of malware) for people and businesses worldwide (with the possible exception of software houses such as Microsoft, MacAffee & co and Novell). But overall, an absolute boon.

So... Novell's Linux business grew by 33% mostly thanks to Microsoft selling Linux... And according to you, Novell is participating with Microsoft in preventing Linux adoption?

"The only thing then that Novell has bad karma from, then, is that Novell profits from all this. Novell is complicit in Microsoft's continued success in suppressing the adoption of Linux. Adopting Linux would be an absolute boon (huge reduction in costs, death of malware) for people and businesses worldwide (with the possible exception of software houses such as Microsoft, MacAffee & co and Novell). But overall, an absolute boon.

So... Novell's Linux business grew by 33% mostly thanks to Microsoft selling Linux... And according to you, Novell is participating with Microsoft in preventing Linux adoption? Lemur2, you're getting more entertaining by the day. Priceless stuff, this. "

There is quite a lot of effort needed to ensure that Linux has a perfectly viable defense against patent threats.

There is really only one source of patent threats against Linux, and that is just a Microsoft PR exercise. Enabled by Novell.

Everything else that Novell does is fine, and indeed helps. Just this one deal spoils their effort, and gives Novell a considerable amount of bad karma.

BTW ... Microsoft giving out coupons for Novell Linux, which includes GPLv3 code, also gives a libility to Microsoft to uphold the terms of the GPLv3, and not sue anybody for using Linux (which after all Microsoft helped to distribute to some people in the first place).

Microsoft wants to have it generally believed that one is safe from patent threats from Microsoft only if one uses Novell SLED. The GPLv3 license points out that the exact same code is used elsewhere, so that all users of that code should be immune from patent threat.

The SFLC believes that the Linux position holds the high ground. Microsoft seem to believe that also, because they refuse to specify what patents they think are at issue, and they haven't actually sued anyone for using Linux.

Still somehow the Microsoft PR, that holds that there is a risk in using Linux other than Novell SLED, seems to hold some credibility in people's minds. Heaven knows how.

Nice attempt at sidestepping Tom's primary point. Novell's Linux business grew substantially -- largely, due to the direct involvement of Microsoft: "Microsoft is the world's largest reseller of Suse," McCarry told ZDNet UK. "The $195m comes out of the $240m we agreed with [Microsoft] when we set out on this path. That's 81 percent." Seriously, how do you reconcile your constant zealotry with reality? Answer: You don't. You ignore reality.

What reality did I ignore, and what statement that I posted do you contend does not relate to reality?

Microsoft did indeed hugely boost Novell's sales of Linux ... and they did it by making a deal with Novell that pretends (in a PR sense) there is a problem for anyone who installs and uses any Linux that is not SLED.

So typical of Microsoft ... "buy from us or else".

This is the very heart of the problem, and not the redeeming quality you seem to be imagining, of the Novell / Microsoft deal.

Novell themselves recognised how damaging that position (taken by Microsoft immediately after signing the deal) was, and they immediately denied anything to do with it following the deal ... but that was too late by then, and the damage to Novell's reputation was done.

"Microsoft is the world's largest reseller of Suse," McCarry told ZDNet UK. "The $195m comes out of the $240m we agreed with [Microsoft] when we set out on this path. That's 81 percent."

I think you might want to re-read that, understand how stupid that statement is, understand what a feat of financial gymnastics it is and ask yourself what it has to do with anything that's been said ;-). Novell are trying to paint the $195 million as Linux revenue when it isn't any revenue they have generated and is merely funding from the original deal.

In the psychiatric social studies world, there is a line of study in those kinds of relationships ;-).

Novell's Linux business growing does not mean that Linux is more adopted, it could mean that only distributors are changed.
That's even what you mentioned in the news!

And I guess you understood what lemur was trying to say. By strengthening the point MS is making they actually could make it harder for other companies to sell their distributions or Linux at all and by that (FUD) prevent more widespread adoption.

Novell's Linux business growing does not mean that Linux is more adopted, it could mean that only distributors are changed.
That's even what you mentioned in the news!

And I guess you understood what lemur was trying to say. By strengthening the point MS is making they actually could make it harder for other companies to sell their distributions or Linux at all and by that (FUD) prevent more widespread adoption.

There is another possible approach for Microsoft to take (known as the Embrace/Extend/Extinguish method):

(2) Get Microsoft technologies, such as for example .NET (Mono), Silverlight (Moonlight) and Office macros (VBA) embedded deeply into the SLED product, and as a bonus into Linux in general if they are naive enough to accept it.

(3) Try to starve other distributions for enterprise customers.

(4) Sue remaining large enterprise users of other Linux distributions.

(5) Buy out Novell.

(6) Drop SLED ... or better yet (from an anti-trust point of view), charge people a fortune for using it.

(7) Profit.

Microsoft/Novell are well underway with steps (1) and (2), and Novell have commenced on step (3).

So... Novell's Linux business grew by 33% mostly thanks to Microsoft selling Linux... And according to you, Novell is participating with Microsoft in preventing Linux adoption?

Sit down, actually think and ask yourself why on Earth Microsoft would help a competitor, Novell, sell Linux, another competitor, in installations where Microsoft compatibility is a must and SLES systems will be surrounded by Windows Server in Windows AD domain set ups. Do you think the Linux servers will still be there in a few years' time? What do you think would happen if Microsoft could ensnare Red Hat installations in this?

Novell isn't conspiring, they're just stupid. Microsoft has a bit of a strategy here, and you can see what it is with the terms of the deal.

Sit down, actually think and ask yourself why on Earth Microsoft would help a competitor, Novell, sell Linux, another competitor

Oh, there's no need to think, it's plainly obvious. There's a market for selling and providing support for Linux installations, and Microsoft jumped on the opportunity to do so. They realised they could make money by selling and providing support for Linux, so that's what they're doing.

Contrary to popular belief, Microsoft isn't out for world dominance and the presidency of the US. All they want is money, money, and money. Like any other company.

Sory, I don't do black helicopters. I know you have an axe to grind about Novell (although I believe there's not much iron left in that axe after all the grinding you've been doing during the past few years), but that's your problem.

Oh, there's no need to think, it's plainly obvious. There's a market for selling and providing support for Linux installations, and Microsoft jumped on the opportunity to do so.

If you believe that then you have taken leave of your senses, and it is totally at odds with the nature of the deal and relationship that exists.

Let's put it this way, there's more of a market to be had in selling your own stuff and making sure Linux installations (who you compete with) don't encroach on you selling your own stuff.

They realised they could make money by selling and providing support for Linux, so that's what they're doing.

Meanwhile, on planet Earth, the successful companies who have their own stuff to sell (things like, oh, Windows Server) look after those interests first and make sure that competitors (oh, things like Linux distributors) don't encroach on their ability to sell their own stuff and make money.

Selling and providing support for your competitors dilutes your business in a rather stupid way, and the proof is in Novell's overall financial results where they have had to stretch out their Linux business in an esoteric way to mask the truth.

Sory, I don't do black helicopters.

Ha, ha, ha, ha, ha. When you're painted into a corner and you're shown to be just a bit daft, paint the opposing position as a conspiracy theory by mentioning black helicopters. We get it.

It's a wild and fantastical conspiracy theory that it is not normal business practice to do deals with your competitors to try and stop them from competing with you because they're eating all your lunch. I know. It's so far-fetched.

I know you have an axe to grind about Novell (although I believe there's not much iron left in that axe after all the grinding you've been doing during the past few years), but that's your problem.

Oh, there's plenty of iron left, which is equal to Novell's stupidity, and there's no harming in pointing it out. That's why people make comments ;-).

Novell isn't conspiring, they're just stupid. Microsoft has a bit of a strategy here, and you can see what it is with the terms of the deal.

Microsoft is definitely strategizing but I don't think it is as sinister as you make it out to be. They know people are going to use Linux and they finally got over ignoring and then attempting to destroy Linux. Now they know it is better to interoperate with Linux to expand their market. If customer's are going to use some Linux systems anyway Microsoft might as well sell them SLES, probably along with Windows. The deals they made with Novell ensure that their customer's can use both Windows and Linux together effectively and without any legal gray areas. I doubt Microsoft is going to shoot itself in the foot by screwing their existing customers and going back on their support for Novell. This whole anti-Novell crusade is just fueled by paranoia. Microsoft is a company, not a person. As a company they are going to do what is most profitable for them in the current market. Ignoring Linux would be less profitable for them and they know it.

However, this will lead to tentacles in-grown to a Linux distro as Novell SuSE Linux so they can be tied to it for life.

Every area someone enters and does so successfully Microsoft goes for the jugular and tries to destroy them by either buy out or joint venture.

When MS-Novell joint deal occurred, Novell started laying off developers on SuSE Linux and they have continued to do so I had a friend that worked for the and he was let go.

Microsoft knew in the Server arena against Linux/Unix distro they would really struggle to compete now they have a division started so they will let the in-road fighting hurt SuSE and it will implode eventually under the strain of the opinion that they betrayed the Linux community at large.

If anyone recalls SuSE or OpenSuSE usage has been dropping since the MS deal or whatever Microsoft calls it.

Well I'm not suffering under the delusion that my opinion is 'the truth' tm. But I do have an opinion, which is that Microsoft has realized that they can't get rid of Linux and open solutions (though god knows they've tried). So if there's going to be a Linux solution, it should be a Microsoft certified solution.
One which they can control to some extent (money ties) and make sure it's working well with their propriety solutions which will make it less important for enterprises to employ fully open solutions.

Enter Novell, a company bleeding while trying to reinvent itself with Linux as their new direction. They are in dire need of cash and also something that may give them an edge against the competition (Red Hat). For Microsoft this is an opportunity, if they can make Novell into a top Linux enterprise solution and have it work great with their own propriety solutions then they will increase their chances of being part of Linux based business. Also, by having Novell advertising that they're safe from future patent litigation they might manage to make the Linux 'patent-threat' appear more solid.

Novell on the other hand have very little to lose as I can see it, without the immediate help of Microsoft's big wad of cash ($348 million) they'd probably been in deep shit. So now they will put great effort in maximizing the edge they've aquired with in interoperability with Microsoft solutions as a selling point. Meanwhile continuing to work on Mono, Moonlight and likely other future Microsoft 'technologies'.

Personally I don't like it. Vendor lock-in has made me appreciate fully open solutions and I want to see as much effort as possible put towards that goal. To me Novell will only give Microsoft's propriety model and propriety technologies a higher influence which will further stem fully open solutions and technologies. I hope that people will see the long term benefits of totally open solutions over short-term combined open/propriety solutions just as they've seen it over fully propriety solutions.

"However, this will lead to tentacles in-grown to a Linux distro as Novell SuSE Linux so they can be tied to it for life."

How will "tentacles" be in-grown? You are talking about Open Source Software. The common argument is that many eyes prevent this type of thing, as well as fix security holes, etc. Novell Suse Linux is as Open Source as Redhat is. To say there are tentacles would mean that the code Redhat is using also has those same tentacles. Currently, at least to my knowledge, is there anything in SLED that cannot be put into RHEL due to it being open source. Therefore, there are no tentacles.

"However, this will lead to tentacles in-grown to a Linux distro as Novell SuSE Linux so they can be tied to it for life." How will "tentacles" be in-grown? You are talking about Open Source Software. The common argument is that many eyes prevent this type of thing, as well as fix security holes, etc. Novell Suse Linux is as Open Source as Redhat is. To say there are tentacles would mean that the code Redhat is using also has those same tentacles. Currently, at least to my knowledge, is there anything in SLED that cannot be put into RHEL due to it being open source. Therefore, there are no tentacles.

You seem to be assuming that because Linux contains no copied source code of Microsoft's then it is immune from IP problems. It might be immune to accusations of copyright violation, but it probably is not immune from attack via patents.

Microsoft has a term for this ... in Microsoft's past threats towards Linux over IP issues, Microsoft has coined the term "cloned technology". Microsoft's Open Specification Promise, for example, uses this term and it specifically excludes that which it terms "cloned technologies" from the Open Specification Promise.

Microsoft often refers to Samba and OpenOffice as "cloned technology" ... even though Microsoft did not invent networking, and Microsoft did not invent Office suites, and Microsoft's own products themselves in these arenas are very much arguably clones of earlier products of competitors.

However, Microsoft's concept of it being unlawful to clone a Microsoft product might conceivably find some more solid footing when it comes to Microsoft products that are not as clearly derived from ideas embodied in earlier products.

Hence, "cloning" of ASP.NET, ADO.NET and Windows.forms within Mono 2.0, "cloning" of VBA within OpenOffice, "cloning" of Exchange by OpenChange, and "cloning" of Sharepoint by Alfresco are probably the targets for IP threats that Microsoft has in mind.

These Linux programs and features are not copies of Microsoft's source code. Nevertheless, even though Microsoft did not write any of this code, it seems that Microsoft still feels entitled to payment from everybody that runs such code.

Ok, so it states 195 million of the revenue is from Linux in some way, shape or form, and it states some divisions of the company are profitable, but there's a bit of information missing from the links:

1. Which parts are profitable?
2. How profitable are they?
3. And the 195 million question, was the Linux revenue merely revenue, or was part of that profit?

It doesn't help to have even nearly infinite revenue if you aren't making profit as part of that revenue: that part of the information is missing from these links, so saying 3/4 of their business revenue is from Linux directly or indirectly says nothing by itself as to whether or not it's good business for them to be in. We don't want to go back to DOT.COM economics again, do we, where revenue is everything, and eventually you'll make money, just as long as you lose it fast enough???

"While Novell's workgroup business declined by 9 percent, and its service business by a staggering 26 percent, identity and access management's revenues went up 11 percent, and systems and resource management 15 percent. The strongest revenues, however, were found elsewhere in the company: Novell's Linux business sky-rocketed in revenue by 33 percent, to 195 million USD - which is a big chunk of the total of 243 million."

Sorry Thom, you clearly did not read my post correctly: certainly, it mentions revenue, but not in what you wrote, or what you linked to in the zdnet.uk link did it ever mention what profit (if any) was made in regards to Linux. Revenue is absolutely not the same as profit: revenue is what money came in, but does not account for how much money it took to pay out to get that revenue. Again, you can have nearly infinite revenue, but if you don't actually bring in more revenue than costs, you're operating at a loss, and that can only be managed for so long before you need to make a profit at it, or quit that part of a business, unless you've got enough other profitable sources of revenue to make up for that lossy part of a business.

The statement made at the start is that Novell lost money this quarter, overall: the exact details of which portions of their business were profitable and which ones cost them money was not stated.

Revenue is absolutely not the same as profit: revenue is what money came in, but does not account for how much money it took to pay out to get that revenue.

Thom's quote pretty well establishes that most of the revenue is in their Linux-related business. Clearly, Red Hat, whose business is pretty well 100% Linux, has been profitable. So the question is whether Novell is running their Linux business as well, and as efficiently, as Red Hat. My guess is no. Novell is too big a dinosaur, with too much legacy-think, to do as well.

Novell is too big a dinosaur, with too much legacy-think, to do as well.

I agree with that somewhat. I think there are still elements at Novell that are quick to release a product and put some lame brained time bomb or limited functionality on the product until it's purchased. Teaming, application virtualization, patch management are examples of this. Those are barriers to entry for anyone to touch most of this stuff, which is actually really good software more times than not. In the "enterprise" realm, Novell has some offerings that nobody in the Linux realm can even touch. Unfortunately for Novell, their real competitor in these market segments isn't Red Hat, it's Microsoft. The common phrase has been for years, 'has anyone ever gotten fired for migrating to Exchange and Active Directory'?

Overall, I think Novell has improved since 2003. At the very least, us legacy NetWare shops have a way out that doesn't involve primary domain controllers or any design scheme as clunky as that. They need to pull their heads out of their rears when it comes to selling some of the minor software offerings. Don't sell it, give it away. They need to get their software into people's hands. Keeping some of these things exclusive simply isn't an innovative or effective way to grow your brand in the shadow of Microsoft.

The statement made at the start is that Novell lost money this quarter, overall: the exact details of which portions of their business were profitable and which ones cost them money was not stated.

Don't worry, that's very much intentional, and the article is merely a mouthpiece as Thom well knows ;-).

Novell always quote Linux business percentage increases (the business is pretty small to start off with compared with the whole) in the hope that they can paint over that it is not taking up the slack from the huge and perpetual decreases in their bread and butter workgroup, Novell and services businesses.

If you want to know how stupid they are, just read this.

"Microsoft [our biggest competitor and the one who is replacing Netware with Windows Server] is the world's largest reseller of Suse," McCarry told ZDNet UK.

Novell always quote Linux business percentage increases (the business is pretty small to start off with compared with the whole) in the hope that they can paint over that it is not taking up the slack from the huge and perpetual decreases in their bread and butter workgroup, Novell and services businesses.

Maybe you should read the article. Linux makes up for 195m of the 243m in revenue, which isn't small at all. While net income would always be a better measurement, earnings calls generally focus on revenue.

"Software maker Novell reported second quarter Linux revenue of $29m (£14.5m) from flat total revenue of $232m, profit reached $2m compared with a $12m loss for the same period last year."

Rather a big difference, no? One wonders where the $166 million has come from, because it's bigger than a 33% jump. You see Thom, I found that out with five seconds of Googling and it was the top link.

Novell even have even had to explain their Linux figures to people in the past:

If $195 million out of their total of $243 million was coming from their Linux business then they would be more than making up from the decline of Netware and their work group business, because that figure would mean that Linux had almost totally replaced Netware revenue and they had probably overtaken Red Hat! Alas, that is not the case and it is such a feat of wishful financial thinking that it's rather amusing.

You always see Novell talk up their Linux business where they talk about percentage increases, but their Linux business is still very small when compared with their work group business.

What's in the work group division? Netware. Novell's bread and butter and the bedrock of their revenue. They are losing that revenue faster than any Linux business can make up the shortfall, and that has been the long and the short of it over the past few years. When you factor in the services side, most of which was a business mistake from the get-go, then it really doesn't matter how much Novell's Linux business grows.

Microsoft and Windows Server have been continually eating Novell and Netware's lunch for years, and Novell have had no other idea of how to deal with it (many companies actually respond and improve their products) other than to go to their biggest competitor and say "Pretty please. Don't put us completely into the red. We'll do a deal for you which will allow you to get a foothold in many Linux environments". That's where the balance is in that relationship, so don't get fooled by "Oh, if we didn't do this deal then we wouldn't get into this environment, or that environment". That's the way abuse victims think ;-).

That's the only reason why Microsoft hasn't completely driven Novell into the sea yet, but the clock is ticking until they are no further use to them. So, I hope Novell are actually working on something to compete head-to-head with Windows Server, with no assistance from Microsoft, rather than sitting on their hands and thinking "Phew, that deal saved us".

So, I hope Novell are actually working on something to compete head-to-head with Windows Server, with no assistance from Microsoft, rather than sitting on their hands and thinking "Phew, that deal saved us".

I don't think you quite understand their product line. They have been working on something to compete with windows server since 2004. It's called open enterprise server. Like I posted above, it's the core "novell network" services abstracted and layered on top of either Netware or SLES. You can properly run a soup to nuts workgroup stack using all Novell products and no Microsoft products. So with that, they're already there.

No, the real problem they have is building new adoption for it. Technically, the product is fairly sound so that's not the issue. It's an uphill battle for sure, but it's not a technical thing they can fix, it's a mind share issue which Novell has struggled with for years.

The problem with Novell (and IBM) is that they are both under the impression that building the best mouse trap with automatically attract people to said mouse trap.

The flaw in that is the equivalent to Soviet style infomercials where Microsoft has plenty of shrills spouting lies and half truths about inferior products pretending they are better. Their idea is, who ever "barks" (barkers as in shrills in booths selling products) the most and loudest and longest wins. Meanwhile Novell had their heads in the sand. What? Marketing? What is that? Why do we need to do that?

The other flaw in Novell's strategy is assuming that their competition will play fair in general. Novell had no clue about how dirty Microsoft would get in doing pretty much anything they had to in order to take top spot in any field where they could get control of distribution channels and taken doe eyed (like deer looking into headlights) CEOs that are impressed solely upon how rich someone is and not on the content of the products someone is selling.

The fact is, most companies and agencies tend to be doe eyed when a rich person talks to them and they will listen to and buy things that person tells them to. All you have to do is look at Microsoft products, their marketing and distribution tactics (blocking distribution channels), and products compared to Novell's.

All prejudice aside, Novell has better products. EXCEPT that their products works so well on their own that you don't need an industry of 3rd party vendors supporting their products. So if you are a 3rd party company you can make more money off of Microsoft products than you can with Novell products.

That is a 3rd area where Novell missed out and were clueless or helpless if they knew what was going on.

That's just the facts. You can't just make the best products engineering wise. You have to be a shrill, a barker. You have to have a "name" for a CEO and that CEO and entourage has to assume that sales will only happen when you hobnob with top officials that are easily swayed by making feel good that your CEO is willing to talk to them and see them. And you have to develop and encourage 3rd party companies to support and expand upon your product so their is a culture, a universe of planets around your company.

Seriously though, I agree with you. Theirs isn't an issue of engineering. It's really their business sense that doesn't seem to be working very efficiently.

Well that and their support. They have gone from award winning to just another outsourced operation. At $500 a clip, it's horrible to have to struggle to understand the support engineer due to language barriers. I've dumped our Novell support contract and instead rely on consultants.

For starters, Novell's headline figure of an increase of 33 per cent in quarterly Linux revenues translates to just $8.2 million in cash, a few minutes' chump change to the really big IT houses that turnover billions.

Second, Red Hat turns over at least four times what Novell's Linux business does. The question is whether, as de facto #2, Novell is closing that very large gap with Red Hat and winning more of the available business. They've been rather quiet about that.

I'm not saying this to knock Novell as a Linux house. Good luck to them; SuSE is a great distro. But this is business and to be honest it doesn't look all that good, and perhaps especially not to Novell's stockholders. Novell could have returned their cashpile to stockholders or purchased something else instead of SuSE, something that might have shown more revenue after four years now than $120 million pa and a distant second place to the market leader.

This is the kind of question boosterist articles like the ZDNet one never ask. And it's complicated by the tie-up with Microsoft, since the obvious question is: if Novell hadn't done a deal with Microsoft, would their Linux financials have failed to grow and would they be even further behind Red Hat? That is a scary thought, since if the answer is "yes" it means that Novell have lost the fight with Red Hat in the public eye and are screwed.

As it is Novell seem a) stuck a long way behind Red Hat, and b) don't seem to be making enough from Linux to offset the decline in their legacy business.

Yes, I do like Linux but this makes the whole thing seem very small beer. Linux's commercial foothold and userbase still seems alarmingly and stubbornly small, at least on these figures. It must be a cause for concern. In the meantime, enjoy Novell while it lasts because it's pretty doubtful it can last indefinitely.

Linux's commercial foothold and userbase still seems alarmingly and stubbornly small, at least on these figures. It must be a cause for concern.

I voted insightful, like what your comment again is. But I don't see the relatively small Linux marketshare as a big concern.

If only a few percent of the world's computer users use Linux, so what? Only a few people fly airplanes, but we all need services provided by air traffic nevertheless. Maybe not a perfect analogy, but similarly, quite many computer-related things, like Internet services, rely on Linux. Quite a big percent of the world's leading super computers use Linux (they could use another OS too, of course, but they have had good reasons for choosing Linux). Etc. So Linux does what it does quite well.

Linux is also a flexible and secure desktop platform capable of doing practically all things that most people need from their desktops, albeit maybe still being a bit too geeky for everyone out there. But it is having its place there on the desktops also, like also in mobile industry etc. And that place, Linux marketshare in general, is already bigger than just a small niche too, and growing, although only gradually.

Secondly, I don't think that the Microsoft OS monopoly can remain like what it is forever. It is just too unideal situation for everyone except MS itself to depend on a single OS vendor and on its whims and policies. Everyone wants change in that sense, but most people just dare not make the jump to something else just yet. Linux could be quite a good option for many of those looking for more open OS / platform alternatives (or what other serious open (not closed, nor controlled by a single company) OS alternatives are there besides of Linux? BSD or OpenSolaris maybe.).

"Linux's commercial foothold and userbase still seems alarmingly and stubbornly small, at least on these figures. It must be a cause for concern.

I voted insightful, like what your comment again is. But I don't see the relatively small Linux marketshare as a big concern. First of all, I don't think that the Microsoft OS monopoly can remain forever. It is just too unideal situation for anyone except MS itself to depend on a single OS vendor and on its whims and policies. Everyone wants change in that sense, but most people just dare not make the jump to something else just yet. Secondly, if only a few percent of world's computer users use Linux, so what? Only a few people fly airplanes, but we all need services provided by air traffic nevertheless. Maybe not a perfect analogy, but similarly, quite many computer-related things, like Internet services, rely on Linux. Quite a big percent of the world's leading super computers use Linux (they could use another OS too, of course, but they have had good reasons for choosing Linux). Etc. So Linux does what it does quite well. Linux is also a flexible and secure desktop platform capable of doing almost all things that people want from their desktops, albeit maybe still being a bit too geeky for everyone out there. But it is having its place there on the desktops also, like also in mobile industry etc. And that place, Linux marketshare in general, is already bigger than just a small niche too, and growing, although only gradually. "

If you chnage your focus away from just "desktops" to the wider arena of computing in general ... Linux market share is not alarmingly small at all.

Linux runs on routers and switches, mobile phones and handhelds, TVs and domestic appliances, in games consoles and in server rooms ... it stretches all the way from wristwatches to supercomputers.

Windows and OSX are the operating systems that have alarmingly and stubbornly small commercial foothold and userbase in that wider arena.

It's my fault for not making it clearer. I said "commercial", as distinct from no-cost of the CentOS or Debian kind, but should have spelled it out. What I meant was whether there's a viable model for running a business off Linux. Of course, the fact that companies like Red Hat or IBM are doing OK with their Linux offerings would suggest the answer is Yes. But others which are struggling, like Novell (arguably) or Ubuntu (trying to gain a revenue foothold), would also suggest there are some considerable "Yes Buts" involved. The answer could be "Yes, but there's only room for a couple of players and their places are already taken. Few people are interested in dealing with anyone else, so the also-rans will always struggle to find enough revenue to sustain more than a very small business. The paradox is that hardly any outfits of any size are prepared to risk their IT needs with a very small business. They want a big, well-founded one so will always go with the market leaders."